A powerful rightwing pressure group, the American Legislative Exchange Council (Alec), is pushing states to adopt a new law shielding all US businesses from “political boycotts”.
Although primarily aimed at protecting controversial industries such as fossil fuel companies, big agriculture and gun manufacturers, the proposed legislation is written to prevent boycotts by investors, banks and other companies of any US business.
It comes amid rising consumer pressure on firms over whom they do business with, and follows the decision by major retail stores to stop selling MyPillow products after its chief executive allied himself with Donald Trump’s false claims of fraud in the 2020 presidential election.
Alec, which is funded by major corporations, intends to press state legislators to adopt the readymade law, the eliminate political boycotts act, at its closed-door States and Nation Policy Summit in Washington DC at the end of this month.
Some Republican-led states have passed hundreds of pieces of Alec’s model legislation almost word for word, including laws pushing the conservative agenda on immigration, voting suppression, the environment, guns and energy policy.
The new model legislation requires every “governmental entity”, which covers a wide array of bodies from state government to local police departments and public universities, to include a clause in contracts requiring businesses to pledge they “will not engage in economic boycotts”.
According to the text of the proposed law, which is written by Alec’s lawyers so that all a legislature has to do is fill in the name of its state, it is a response to banks, investment funds and corporations refusing to invest in or do business with industries that damage the environment or are aligned with oppressive laws.
“Corporations are boycotting and sanctioning essential industries, such as fossil fuel and agriculture producers, by refusing to provide them with products or services or imposing undue burdens on them,” the proposed law says.
“Banks are increasingly denying financing to creditworthy companies solely for the purpose of marketing their environmental or social justice credentials, to the detriment of their clients and shareholders.”
The huge investment company BlackRock is among nearly 400 financial firms to have sold off shares in big oil companies over their failure to pursue sufficiently climate-friendly policies.
Some corporations are increasingly concerned that consumer pressure will cause other companies to boycott them over their funding of rightwing politicians and causes, or social positions.
The model legislation follows an Alec meeting in Atlanta in the summer at which participants launched a push against “woke capitalism”, claiming that boycotts may break financial laws.
“The collusion of corporations, and institutions to boycott, divest from, or sanction any industry may violate existing antitrust and fiduciary laws and harms consumers, shareholders, and states,” the model legislation states.
The readymade law gives state attorneys general the power to “examine under oath any person” in connection with a boycott, and to require them to file a report about their activities. The attorney general would also be able to “examine any record, book, document, account or paper as he may deem necessary” and to impound them.
The eliminate political boycotts act has its roots in legislation already on the books in more than 30 states to block boycotts of Israel over its oppression of the Palestinians.
For that reason the proposed new law does not extend to individuals after several states were forced to amend legislation when courts ruled that requiring individuals to sign pledges not to boycott Israel intruded on free speech rights.
Kansas revised its law in 2018 after a Wichita teacher brought a federal lawsuit in response to being told to sign a pledge not to boycott Israel in order to keep her job. Similarly, Texas narrowed its law after a speech pathologist lost her contract with a school district.
However, an Arkansas newspaper publisher has asked the supreme court to intervene after a federal appeals court upheld a 2017 state law that cost the publication advertising by the state university after it refused to sign the commitment not to boycott Israel.
The latest model legislation expands on another law written by Alec, the Energy Discrimination Elimination Act, introduced since the beginning of the year and passed by several states to shield big oil from share selloffs and other measures to protest the fossil fuel industry’s role in the climate crisis.
Legislation written by Alec has been introduced thousands of times in state legislatures across the country, and passed into law in hundreds of instances. Model laws are written by Alec “taskforces”, usually jointly chaired by a state legislator and a representative of an interested industry.
Alec was behind the proliferation of “stand your ground” laws in conservative states, permitting the use of deadly force by any person who feels threatened, which George Zimmerman used as a successful defense for shooting Trayvon Martin in Florida in 2012.